Interim Results

RNS Number : 1500X

Barkby Group PLC (The)

30 April 2021

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

30 April 2021

The Barkby Group PLC

("Barkby" or the "Company")

Interim Results   for the 26 weeks ended 31 December 2020

The Barkby Group PLC (AIM:BARK), the diversified business group, announces its unaudited interim results for the period ended 31 December 2020.

Charles Dickson, Executive Chairman of the Barkby Group, commented:

"Barkby has weathered the COVID-19 pandemic largely due to the success of our highly cash generative commercial property development business. Activity within that division is returning to pre-pandemic levels with a number of new opportunities in the pipeline.

As the economy reopens, our pubs and coffee business are poised for significant growth and a return to profitability. All of our pubs opened on the 12^th of April for outside service only and trading has been very encouraging. We are also seeing strong accommodation bookings for May 17^th onwards, which is a positive sign for future demand. 

The Group's investments in SleepHub and Verso Biosense are performing well with both businesses recently announcing significant new collaboration agreements.

Our diversified structure and strategy has allowed us to support the most heavily impacted businesses without a significant increase in external bank debt or equity funding from shareholders.  As previously announced, the Tarncourt lending facility, which was put in place at the point of the IPO, has been increased to £5m to provide further liquidity.

The Group is in a strong position to benefit from the further lifting of government lockdown restrictions. We look forward to the next 12 months with increasing confidence, while recognising uncertainties remain."

OPERATIONAL HIGHLIGHTS

Commercial property division

· Practical completion of Hastings development in August 2020 and completion of sale to Hastings Borough Council, with a net balancing payment receipt of £1.8m.

· Exchange of contracts to sell our site at Saffron Walden for £2.85m.

· Exchange of contracts to acquire prime development site in Maldon, Essex.

· Planning permission for 20,000 sq. ft. mixed use retail and trade scheme received at Wellingborough.

Barkby Pubs

· Reopenings in July and September were well supported and demonstrated popularity and resilience of venues.

· All six sites open for outside service on 12 April 2021 and trading has been very encouraging.

· Like-for-like sales down 3% between 1 July and 30 September 2020, however excluding July like-for-like sales were +21% in August and +24% in September.

· Like-for-like sales down 45% between 1 October and 31 December 2020 following re-imposition of trading restrictions.

· Acquisition of a nine-year lease of The Harcourt Arms in September 2020.

· Well positioned offering for general re-opening on 17^th May

Life Sciences

· Commercial launch of SleepHub in November 2020 with eight new commercial partnerships secured post period end.

· Vivoplex renamed to Verso Biosense and post-period end has signed two collaboration agreements. 

FINANCIAL HIGHLIGHTS

· Revenue for the 26 weeks to 31 December 2020 was £7.8m, with EBITDA loss of £1.2m and a net loss of £2.0m.  This includes start-up expenses of £0.5m incurred in relation to Cambridge Sleep Sciences.

· Following repayment of HSBC overdraft of £1.5m, £2.7m of new facilities have been secured including a £1.5m increase in the Tarncourt facility to £5.0m and an extension of its repayment date to 30 June 2023.

· Net cash available including undrawn facilities was £1.5m as at 31 March 2021.

CHAIRMAN'S STATEMENT

I am pleased to announce the interim results for The Barkby Group PLC for the period ended 31 December 2020.

Over the last six months our primary focus has been the wellbeing of our staff and customers, and I would like to thank our team for their unwavering commitment during this unprecedented period. Despite the obvious challenges that the first half of the year presented, the team worked hard to position the business appropriately and we are looking forward to the future with confidence as the economy begins to unlock.

During the six months to 31 December 2020 our pub venues reopened twice, in July and December, following the lifting of the UK Government restrictions in place at that time.  The Board was encouraged by these reopening processes, which saw customers returning across all venues, demonstrating the popularity and resilience of our venues. The Board believes that this is a positive indicator for when we are able to fully reopen.

The opportunities that Barkby is seeing in the hospitality sector, in terms of available sites and potential business acquisitions, are even stronger than the Board had anticipated at the time of the Company's admission to AIM. The Board is confident that the current dynamics in the hospitality property market will allow the Group to secure new sites at significantly reduced rents and with lower capital costs per site.

All of our pubs have now reopened for outside service only and early trading has been very encouraging. We are also seeing strong bookings from 17 May onwards and the Board is optimistic that trading conditions will remain strong over the summer months due to pent up demand and staycations.

At Centurian, a contactless test drive procedure was implemented in response to lockdown restrictions, including personalised videos sent to customers before site visits. A "click and collect" sales model proved to be effective, and in many cases produced faster purchase decisions. We also invested in our digital marketing and social media platforms, which has aided the revenue growth.

Centurian was profitable at EBITDA level for the 26-week period to 31 December 2020 and trade remains strong, however given the uncertainty around consumer behavior we will continue to monitor performance carefully.

The Group also continues to deliver on its strategy of investing in growth businesses with the ability to disrupt. Investments in SleepHub and Verso Biosense are performing well, with significant commercial progress being made at both companies. I am particularly excited about the potential of both businesses to supplement Group earnings for FY2022.

Our liquidity remains strong and the diversification of the business means that the Group is in a strong position to benefit from the lifting of government restrictions. I look forward to the next 12 months with increasing confidence.

Current Trading

Further to our trading update of 3 March 2021, the Group makes the following updates:

Commercial Property Development

We are seeing the market return to pre-pandemic levels and we have six major tenants due to sign agreements to lease units in two of our pipeline development sites. We are also seeing more opportunity in the market and are looking to significantly grow our development pipeline over the next six months.

Saffron Walden

The land was acquired by the Company in 2010 and is still held at book cost. A series of successful planning applications have been made since the land was acquired, and the site now has planning permission for the construction of 35 residential units. We have exchanged contracts to sell the site for c.£2.85m which will result in a profit on sale of £1.8m, which is expected to be recognised in the current financial year. Completion of the sale is expected during the summer of 2021.

Wellingborough

We have made a further planning application to add a drive-thru fast-food restaurant on the front of the site to meet a pre-identified requirement from a national branded operator. Construction is due to start in autumn 2021.

Maldon

We have now submitted a planning application to develop a 15,400 sq. ft. mixed-use retail and trade scheme at the site. We are planning to start construction towards the end of the year.

Huntingdon

We submitted a planning application for a 30,000 sq. ft trade scheme at Huntingdon last year and have subsequently amended the application to take into account the change in tenant requirements. We expect to receive planning this year and commence works in 12 months' time.

Further opportunities

We are currently in legal negotiation to acquire a further development site in the South East. We are also actively exploring opportunities to significantly expand the real estate side of our business, which we believe is core to the Group's business and where we see significant growth opportunities.

Barkby Pubs

G iven the recent Government guidance of 17^th May for reopening indoor hospitality, we will be in a strong position to benefit from restricted international travel, staycations, pent up demand for hospitality and changing consumer behavior.

Workshop Coffee

We are seeing a very encouraging pickup in wholesale revenues as venues reopen. We are planning to reopen two of our retail locations around the 17 May as lockdown restrictions are lifted.  Whilst the pandemic has seen excellent growth in Workshop's online platform, the Board are optimistic that we can also return to strong growth across our retail business once restrictions are lifted fully.

Life Sciences

Cambridge Sleep Sciences Ltd ('CSS')

Disruption to sleep during the COVID-19 pandemic has been widely reported. According to The Telegraph, the British Sleep Society found 70% of British people aged 40 to 63 have reported changes to their sleep patterns during the pandemic. 

The need for help to restore natural sleep patterns has never been greater and the opportunity for CSS is significant. P&S Intelligence state that the global sleeping aids market size was $78.7 billion in 2019, and it is projected to witness a CAGR of 7.1% during the period 2020 to 2030.

Since our last update, SleepHub has announced three new partnerships to enable it to capitalise on this market opportunity.

Probitas Technologies, a specialist IT distributor across EMEA, will initially be offering SleepHub to the Portuguese, Spanish and French markets. Health and wellbeing ecosystem creators, Nexus Digital Technology, will make SleepHub available as part of their health and wellbeing app. Finally, My Benefits World will be making SleepHub available to thousands of employees through its online employee benefits solution. 

These partnerships follow the recent announcement of the new collaboration agreement between CSS and Parkinson's Concierge, to help address sleep issues associated with Parkinson's Disease.

We are exploring licensing opportunities for the IP of SleepHub. We have had discussions with several potential partners and see this as a significant revenue source as we develop the IP further.  CSS is currently developing a second generation of SleepHub products and expects these to be available in Q3 2021. These will likely include wireless earbuds, a CSS App and further technology enhancements to the product experience.

Verso Biosense Ltd

Our female health investment, Verso Biosense, has continued to make excellent progress. Engineering breakthroughs have allowed us to progress faster than expected, resulting in major improvements in next generation chip sets, monitoring functions, electronics and garment design. We will be moving into a clinical study in Q2 2021.

Since our last update we have announced partnerships with London's Women Clinic and Homerton University Hospital.  Both parties will collaborate with Verso, using its uterine monitoring device to refine the technology and biosensing platform to meet the needs of its fertility patients. Verso's platform captures critical in-vivo, biosensing data for optimisation and personalisation of IVF treatment, providing actionable insights for clinicians and patients.

Liquidity

We have managed cash tightly through all three national lockdowns and have increased cash headroom by refinancing the current £3.5m Tarncourt facility into a new £5m facility with Tarncourt, with an expiry of 30 June 2023.

Furthermore, the Group has taken a £450k loan secured against the freehold of the Wellingborough site from James Dickson, a significant shareholder in the Company and CEO of Workshop Coffee.

The Group currently has net cash available of c.£1.5m as at 31 March 2021. The Board have taken the steps of consulting with their major shareholders regarding a potential equity raise and our shareholders have confirmed their continued support should the Board wish to raise further capital.

Summary

The Group continues to deliver on its strategy to accelerate and maximise opportunities within its existing businesses and to invest in exciting businesses with the ability to disrupt.  Having weathered the COVID-19 pandemic we now look forward to trading conditions improving across the most impacted parts of our business. 

The diversification of the business means that the Group is in a strong position to benefit from the lifting of government lockdown restrictions.  Early trading signs are positive and we expect further improvements as restrictions loosen further in the coming weeks and months.

We would like to thank all our employees, suppliers, shareholders and other stakeholders for their continued support during the period and into the future and we look forward to the next 12 months with confidence, while recognising uncertainties remain.

Charles Dickson

Chairman

30 April 2020

Enquiries:  

The Barkby Group PLC
Charles Dickson, Executive Chairman Douglas Benzie, Chief Financial Officer
FinnCap (Nominated Adviser and Broker)	[phone]
Carl Holmes/Simon Hicks Tim Redfern / Richard Chambers
Camarco (Financial PR)	[phone]
Jennifer Renwick/Jake Thomas

THE BARKBY GROUP PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

26 weeks ended 31 December 2020

			26 weeks ended		15 month period ended
			31-Dec-20		02-Jul-20
	Note		Unaudited		Audited
			£'000s		£'000s
Revenue			7,795		12,048
Cost of sales			(6,765)		(11,188)
Gross profit			1,030		860
Administration expenses			(2,663)		(3,538)
Other income			41		367
Loss from operations			(1,592)		(2,311)
Finance income			49		125
Finance expense			(466)		(949)
Loss before tax			(2,009)		(3,135)
Corporation Tax expense			-		(4)
Loss and total comprehensive income for the period			(2,009)		(3,139)
Loss for the period is attributable to:
Non-controlling interests			(77)		(44)
Owners of the Barkby Group Plc			(1,932)		(3,095)
			(2,009)		(3,139)
Loss per share for loss attributable to the owners of The Barkby Group Plc			Pence per share		Pence per share
Basic and diluted loss per share			(1.43)		(2.69)

All of the loss of both of the periods are from continuing operations.

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

THE BARKBY GROUP PLC

 UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

			As at		As at
			31 Dec 2020		2 Jul 2020
			Unaudited		Audited
	Notes		£'000		£'000
Non-current assets
Fixed assets - owned			1,626		1,554
Fixed assets - leased			3,082		2,643
Intangible assets			8,614		8,355
Investments			2,542		2,042
Non-current receivable			167		127
			16,031		14,721
Current assets
Inventories			5,932		4,226
Trade and other receivables			169		466
Contract assets			-		4,898
Other current assets			536		641
Prepayments			319		401
Cash and cash equivalents			665		306
			7,621		10,938
Total assets			23,652		25,659
Current liabilities
Trade and other payables			(1,534)		(1,937)
Other current liabilities			(3,343)		(1,833)
Current borrowings			(6,937)		(8,999)
Current lease liabilities			(592)		(491)
Income tax payable			(88)		(107)
			(12,494)		(13,367)
Non-current liabilities
Non-current borrowings			(5,041)		(4,899)
Provisions			(38)		(28)
Non-current lease liabilities			(2,887)		(2,349)
			(7,966)		(7,276)
Total liabilities			(20,460)		(20,643)
Net assets/(liabilities)			3,192		5,016
Equity
Share capital			1,179		1,164
Share premium			4,493		4,323
Merger reserve			(422)		(422)
Issued equity			5,250		5,065
Profit and loss reserve			(2,058)		(49)
Total equity and reserves			3,192		5,016

THE BARKBY GROUP PLC

 UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

26 weeks ended 31 December 2020

		26 weeks ended		15 month period ended
		31-Dec-20		2-Jul-20
		Unaudited		Audited
		£'000s		£'000s
Cash flows from operating activities
Loss before tax		(2,009)		(3,135)
Adjustments to reconcile loss before tax to net cash flows
Depreciation and amortisation		410		581
Adjustment of deferred consideration		(35)		-
Net finance expense		417		824
Movement in working capital		5,316		(5,491)
Net interest paid		(371)		(774)
Income tax paid		(19)		-
Net cash flow from operating activities		3,709		(7,995)
Cash flows from investing activities
Acquisition of subsidiaries and businesses		(55)		(549)
Purchase of investments		(500)		(1,950)
Purchase of property, plant and equipment		(199)		(194)
Purchase of intangible assets		(230)		(287)
Net cash used in investing activities		(984)		(2,980)
Cash flows from financing activities
Proceeds from issue of shares		125		5,075
Proceeds from borrowings		11,219		8,985
Share issue transactions cost		-		(531)
Payment to shareholders		-		(375)
Repayment of borrowings		(13,139)		(2,981)
Repayment of lease liabilities		(186)		(393)
Net cash raised in financing activities		(1,981)		9,780
Net increase/(decrease) in cash and cash equivalents		744		(1,195)
Cash and cash equivalents at beginning of period		(1,174)		21
Cash and cash equivalents at end of period		(430)		(1,174)

All cashflows are from continuing operations.

THE BARKBY GROUP PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

26 weeks ended 31 December 2020

		Share capital		Share premium		Merger reserve		Retained earnings		Non-controlling interest		Total
		£'000		£'000		£'000		£'000		£'000		£'000
At 2 July 2020		1,164		4,323		(422)		(49)		-		5,016
Loss after income tax and total comprehensive income for the period		-		-		-		(1,932)		(77)		(2,009)
Transfer of loss attributable to non-controlling interest		-		-		-		(77)		77		-
		-		-		-		(2,009)		-		(2,009)
Shares issued to partially settle deferred consideration (Turf to Table acquisition)(a)		2		58		-		-		-		60
Transactions with shareholders in their capacity as shareholders
Exercise of warrants (b)		13		112		-		-		-		125
At 31 Dec 2020		1,179		4,493		(422)		(2,058)		-		3,192

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Notes:

(a)  As part of the settlement of the deferred consideration in relation to the Turf to Table acquisition the Group issued 260,869 ordinary shares on the 1 October 2020 to the Turf to Table vendors.  These ordinary shares were valued at £60,000 based on a 23p per share price.  A further £55,000 was settled in cash.

(b)  On 24 December 2020 the Group allotted 1,452,347 shares to Giles Clarke following the exercise of his warrants at a total price of £125,000 cash.

THE BARKBY GROUP PLC

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

26 weeks ended 31 December 2020

1.  GENERAL

These unaudited consolidated interim financial statements are for the 26 weeks ended 31 December 2020 (3 July 2020 to 31 December 2020).  They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for the 15 month period ended 2 July 2020 (1 April 2019 to 2 July 2020), which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").

The statutory accounts for the 15 month period ended 2 July 2020 have been filed with the Registrar of Companies.  Those accounts have received an unqualified audit report and did not contain statements or matters to which the auditors drew attention under the Act.

The Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future.  Accordingly, these interim financial statements have been prepared on a going concern basis as the Directors are of the opinion that the Company has sufficient funds to meet their ongoing working capital and committed capital expenditure requirements.  A detailed disclosure outlining going concern considerations was provided in the statutory accounts for the 15 month period ended 2 July 2020.  The Directors performed their going concern review as at 31 March 2021 and have concluded that no matters have arisen since that date to change the conclusion of the review.

The interim financial information is unaudited, no dividend has been declared or paid in this interim period.

2.  ACCOUNTING POLICIES

The principal accounting policies and methods of computation have remained unchanged from those used in the preparation of the financial statements for the 15 month period ended 2 July 2020 and are expected to be used for the financial statements for the 52 week period ending 1 July 2021.

3.  LOSS PER SHARE

		26 weeks ended		15 month period ended
		31-Dec-20		2-Jul-20
		Unaudited		Audited
		Number of shares		Number of shares
Weighted average number of ordinary shares in issue		135,422,389		114,896,986
Dilution for warrants outstanding		3,104,138		1,221,341
Diluted weighted average number of shares		138,526,527		116,118,327
		£'000s		£'000s
Loss after income tax		(2,009)		(3,139)
Non-controlling interest(		131		44
Loss after income tax attributable to the owners of The Barkby Group Plc		(1,878)		(3,095)
		pence		pence
Basic and diluted loss per share		(1.39)		(2.69)

4.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment		Land and buildings	Leasehold improvements	Plant and equipment	Computer equipment	Fixtures and fittings	Total
Net book value
		£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
At 3 July 2020		669	344	122	115	304	1,554
Additions		-	10	158	30	18	216
Depreciation charge		(1)	(41)	(39)	(18)	(45)	(144)
At 31 December 2020		668	313	241	127	277	1,626

Land and buildings includes £300,000 of freehold land.  Freehold land is not depreciated.

5.  INTANGIBLE ASSETS

Intangible assets		Goodwill	Product design and development	Patents and trademarks	Computer software	Total
Net book value
		£'000s	£'000s	£'000s	£'000s	£'000s
At 3 July 2020		8,037	69	249	-	8,355
Additions		-	210	11	77	298
Depreciation charge		-	(14)	(20)	(5)	(39)
At 31 December 2020		8,037	265	240	72	8,614

6.  RIGHT-OF-USE ASSETS

Right-of-use assets		Buildings	Pubs	Service concessions	Total
Net book value
		£'000s	£'000s	£'000s	£'000s
At 3 July 2020		325	2,301	17	2,643
Additions and renewals		64	679	-	743
Covid - 19 relief		(8)	(65)	(4)	(77)
Depreciation charge		(89)	(130)	(8)	(227)
At 31 December 2020		292	2,785	5	3,082

In September 2020, the Group entered into a new 6 year lease for The Harcourt Arms, a village pub with 125 covers and 10 rooms to let.  The resultant right-of-use asset was recognised at £679,000, with a lease liability of £669,000 and a dilapidations provision of £10,000 also being recognised.

7.  CASH AND CASH EQUIVALENTS

		31-Dec-20		2-Jul-20
		Unaudited		Audited
		£'000s		£'000s
Cash at bank		647		236
Cash in transit		13		69
Petty cash		5		1
		665		306
Reconciliation to cash and cash equivalents at the end of the financial period
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement of cash flows as follows:
Balances as above		665		306
Bank overdraft		(1,095)		(1,480)
Balance of cash and cash equivalents per statement of cash flows		(430)		(1,174)

8.  LEASE LIABILITIES

Lease liabilities	Balance at	New leases and renewals	Covid-19 relief	Re-payments	Interest charge	Balance at
	2-Jul-20					31-Dec-20
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Building leases	347	64	(8)	(84)	11	330
Pub leases	2,460	669	(65)	(74)	68	3,058
Kitchen equipment leases	9	-	-	(8)	-	1
Service concession leases	24	-	(4)	(11)	5	14
Other leases	-	85	-	(9)	-	76
Total lease liabilities	2,840	818	(77)	(186)	84	3,479
Reported as
Current lease liabilities	491					592
Non-current lease liabilities	2,349					2,887
Total lease liabilities	2,840					3,479

As described in note 6. Right-of-use assets, the Group entered into a new lease for The Harcourt Arms in September 2020.  The lease liability recognised at commencement of the lease was £669,000.

The Group also renewed one of its building leases in the period ended 31 December 2020 resulting in a renewed lease liability of £64,000.

9.  BORROWINGS

Borrowings		Balance at	Proceeds of borrowings	Repayments	Balance at
		2-Jul-20			31-Dec-20
		£'000s	£'000s	£'000s	£'000s
Bank overdrafts		1,480	1,095	(1,480)	1,095
Bank loans		332	1,000	(17)	1,315
Vehicle finance		3,378	7,532	(7,113)	3,796
Other loans		6,385	-	(4,289)	2,097
Loans from related parties		2,323	1,592	(240)	3,675
Total borrowings		13,898	11,219	(13,139)	11,978
Reported as
Current liabilities		8,854			6,937
Non-current liabilities		5,044			5,041
Total borrowings		13,898			11,978

In July 2020, the Group borrowed £1m from HSBC under the UK Government's Coronavirus Business Interruption Loan Scheme.  The loan provided extra liquidity to support, in particular, the Group's Hospitality and Consumer division after a period of severe disruption due to Covid-19.

The completion in August 2020 of the Group's Hastings development and subsequent collection of the resulting trade receivables enabled other loans totalling £4.2m at 2 July 2020 to be repaid in the period ended 31 December 2020.

The Group has access to a term loan facility with Tarncourt Investments LLP, a related party.  During the period ended 31 December 2020, the Group drew down £1.6m from the facility.  The £3.5m facility was due to expire in July 2021, but has been refinanced into a new £5 million facility which now expires on 30 June 2023.  The balance owed on this facility is presented as a non-current liability at both 2 July 2020 and 31 December 2020.

10.  SHARE CAPITAL

Issued and fully paid:

	31-Dec-20	2-Jul-20	31-Dec-20	2-Jul-20
	No. of shares	No. of shares	£'000s	£'000s
Ordinary shares of £0.00860675675675676 each	136,948,282	135,235,066	1,179	1,164
	==================	==================	=============	==============

On 1 October 2020 the Group issued and allotted 260,869 ordinary shares in partial settlement of the deferred consideration relating to the Turf to Table acquisition.  For the purposes of this settlement the shares were valued at 23p each giving a total of £60,000 of equity settled deferred consideration.  In addition to the shares, the Group paid a further £55,000 cash.  The total value of this settlement of £115,000 compared to the existing balance payable of £150,000 resulting in a credit of £35,000 being taken to profit of loss in the period ended 31 December 2020.

On 24 December 2020 the Group issued and allotted 1,452,347 ordinary shares following the exercise of warrants by Giles Clarke.  The Group received £125,000 cash from the exercise of the warrants.

11.  COPIES OF INTERIM REPORT

Copies of the interim report are available to the public from the Company at 115B Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RZ and are available on the website at www.barkbygroup.com.

 

END

 

 

IR UKOURASUSUUR